Porsche is expected to raise in the region of £17 billion to invest in electric vehicle (EV) development after being priced at around 75 billion euros (£67.2bn) in today’s IPO.
The offering will be the second-largest in the history of the German stock exchange in 1996, according to Reuters, putting it close to the market capitalisation of its parent company Volkswagen.
“Porsche was and is the pearl in the Volkswagen Group,” Chris-Oliver Schickentanz, chief investment officer at fund manager Capitell told the news agency.
“The IPO has now made it very, very transparent what value the market brings to Porsche. That, of course, also has a positive effect on Volkswagen shareholders.”
Porsche’s shift to part public ownership follows an IPO completed by rival premium performance EV brand Polestar earlier this year.
The German carmaker made the move after market commentators suggested VW was feeling pressure to boost a share price that has lagged behind that of Tesla – which recently reached $1 trillion (around £740bn) – over the past year.
Porsche’s Tesla-rivalling, fully electric Taycan coupe outsold its iconic 911 in 2021.
The brand expects to be carbon-neutral on the balance sheet in 2030 and, by 2025, half of all new Porsche sales are expected to come from the sale of electric or plug-in hybrid models.
Production of an electric 718 will begin in 2023, while an electric Macan SUV is set to launch later this year.
In 2030, more than 80% of new Porsche sales are expected to be of fully electric models.
Speaking to AM recently, Birmingham Business School professor and Senior Fellow at the UK in a Changing Europe, David Bailey, suggested that the complexity of today’s (September 29) IPO could put investors off.
“It appears that no voting shares will actually go to the public; that bizarrely seems to leave VW’s existing shareholders and unions still in control of Porsche,” Bailey observed.
“An already labyrinthine governance structure becomes even more complex, especially as Porsche‘s chief executive Oliver Blume also has overall control of the VW Group. That might put some investors off.”
This morning shares in Porsche opened at 84 euros and traded at 82.88 euros but fell 5.7% in early Frankfurt trade, Reuter reported. Shares in Volkswagen were down 4.9% in early Frankfurt trade.